WASHINGTON (dpa-AFX) - The Shaw Group Inc. (SHAW) announced it has entered into a definitive agreement to sell substantially all of its Energy & Chemicals business to Technip (TEC) for about $300 million in cash consideration.
Shaw will retain Energy & Chemicals Group personnel in its Baton Rouge office, which will be integrated into the company's Plant Services Division, as well as Shaw Consulting International Inc., which will be incorporated into Shaw's Environmental & Infrastructure Group.
The company stated that it will also retain its Toronto-based operations and is reviewing options regarding future plans for this office. Additionally, Shaw will maintain its obligations under an engineering, procurement and construction contract associated with a large ethylene plant in southeast Asia that is now about 98 percent complete.
Shaw and Technip also have agreed to work toward developing future business relationships involving Shaw's core business units.
Shaw said it expects to recognize a net pre-tax gain of about $15 million, or $10 million after tax, associated with the disposition of operations included in this transaction. The net gain also includes total charges of approximately $75 million pre-tax, which includes potential restructuring related to the businesses being retained, retention of the ethylene contract, transaction costs and other miscellaneous items.
Also, on a pre-tax basis, Shaw currently estimates this process will result in a charge of $43 million in the third quarter of fiscal year 2012, a gain of $66 million in the fourth quarter of fiscal year 2012, and a charge of $8 million in fiscal year 2013.
The divestiture is targeted to be complete in Shaw's fourth quarter of fiscal year 2012.
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